1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies
Hedgie
Hedgie
Articles (10)  | Author's Website |

Bloomberg: Appaloosa's Tepper Says Stock Markets Not in Bubble

November 22, 2013 | About:

Following my previous article: Is this the beginning of a secular bull market?[/b]David Tepper has made another appearance on Bloomberg and opined that the market is NOT in a bubble.

Tepper was the highest paid hedge fund manager in 2012 and he is known for making sound market calls. Head over here for the full interview.

[b]Key takeaways:


1) The market is not in a bubble. He uses S&P and Nasdaq forward P/E multiple to illustrate his point. The below chart shows the P/E multiple (not forward) of S&P500 which has rallied from 17x (1995) to 31x (2000) pre-Internet bubble. Now post-GFC 2008, the market's P/E has been in range bound between 10x to 18x, still well below an implied P/E multiple of 25x.

1629671313.jpg

60333521.jpg

2) Tepper owns s large position in airline stocks which have performed well for his fund.

3) The taper may just provide a knee-jerk drop of 5% to 10% in the market given the stronger underlying U.S. GDP growth next year.

4) He still owns U.S. and European banks.

5) Tepper opined that long/short equity funds are in precarious position given they are only net long 60%, not pure long, only of 100% which he thinks L/S funds cant get long enough.

Given Tepper's stellar performance, his words do provide a prescient call.

About the author:

Hedgie
Agnostic trader. CAIA and CHP charterholder. Twitter: @hedgefundtrades

Visit Hedgie's Website


Rating: 5.0/5 (1 vote)

Comments

Please leave your comment:


GuruFocus Mobile App Available


Select portfolio(s):

  • Loading...

Why you are interested?

Your selection and notes will be stored in your portfolio.

Login to add portfolio
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK